Last-ditch bid to broker deal on budget

Date: 16/11/00

By John Shelley

EU FINANCE ministers and MEPs will meet next week to hammer out a deal on the Union's budget for 2001, amid hopes that a compromise can be struck to end the row over spending on external relations.

The meeting will be the last formal chance to settle their differences before MEPs vote on next year's budget at their 11-15 December plenary session.

The Parliament is insisting that governments must drop plans to cut the EU's aid programme for Mediterranean countries - MEDA - and allocate more money to Serbia in the wake of former President Slobodan Milosevic's downfall.

In an effort to pacify MEPs, member states are likely to argue that a European Commission proposal to give Kosovo an extra € 175 million from this year's budget, because of underspending in other areas, means they can reduce aid to the region next year by the same amount and use this money for either Serbia or the MEDA programme.

They might also agree to allocate an extra € 100 million to these two programmes - cash which could be found without exceeding the ceiling on external aid spending set in 1999.

But whether this will be enough to appease MEPs remains to be seen. They have so far insisted that any funding earmarked for Serbia should not be taken from other programmes, arguing that this was a "big unforeseen event" for which extra money must be found.

If MEPs demand further concessions, governments might agree to provide € 200 million more for Serbia or the MEDA programme from the 'flexibility instrument' - a 'bonus' fund which can be used anywhere as long as overall spending does not exceed the ceiling.

Many member states will be reluctant to use this cash, but diplomats say this may be the only solution as "raising the ceiling is absolutely out of the question".